zero net asset hedge fund

CFA Level III
#1

hi folks,

can anyone explain what’s “zero net asset hedge fund”? and why the active weights sum to zero??

Thank you.

#2

Short assets + long assets = no assets

#3

Also, the active weights sum to zero for the same reason, the long/short positions net to zero.

#4

It’s also called market neutral hedged fund.

#5

Such a hedge fund goes long one asset and short another. The proceeds of the short sale fund the long purchase, thus a zero asset ( as the HF started with 0 or minimal cash ).